How to be accepted for a credit card

Published:

22 March 2012

Topic:

News,Money,Credit Cards

Transferring the balance from your current credit card to take advantage of a 0% balance transfer offer from another provider could be a big part of your financial spring clean. However, if your application is rejected, this will leave a 'footprint' on your credit report, which can have a negative effect upon your credit score and leave you with a nasty financial headache.

Here we take a look at the steps you can take to increase your chances of acceptance.

Know your credit history

Getting a copy of your credit report and giving it the once-over should be the focal point of any financial spring clean, as you need to be sure that the details the credit referencing agencies hold on you are all correct and up to date.

To get a copy of your credit report you need to contact the relevant credit referencing agencies, of which there are three: Equifax, Experian and CallCredit.

If possible you should get a copy of your credit report from each agency and check them against each other to make sure that there are no mistakes or discrepancies that could be bringing down your credit score.

You can apply for and view a copy of your credit file online by going to each agency's website, confirming your identity and paying £2 for the privilege.

This will give you a copy of your statutory report, which will show your personal details, your status on the electoral roll, any outstanding debt you have, missed payments or defaults, any financial links you may have to other people and any recent searches on your file, such as those by financial institutions.

You then need to thoroughly check your credit reports and make sure everything is correct. If there are any errors you need to write to the relevant agency and request it is changed.

If they refuse then you can add your own comments as a notice of correction or, if you want to take things further, you can file a complaint to the Financial Ombudsman Service.

Once you are satisfied that your credit file is in order and you know your credit score, you'll have an idea of whether or not you are likely to be accepted for further credit.

Assess your financial position

In addition to your credit score, lenders will also want to know details of your annual income to help them assess whether or not they think you will be able to repay the debt.

So before applying you should take stock of your total monthly income and expenditure, work out whether you have any disposable income and gauge whether you will be able to afford to take on the responsibility of another credit card.

You should also take this opportunity to check how much you owe on any existing credit cards you hold as, if they are all close to their limits, lenders may be reluctant to give you access to any more credit.

If this is the case it may be worthwhile trying to pay down these debts before making any further applications.

Be realistic in your applications

The hard truth is that, if you have anything other than an excellent credit score, it is unlikely that you will be accepted for any of the market leading deals.

So if you have a fair or even a good credit score, there might be little point in applying for cards with the longest balance transfer deals or the lowest APR. The danger is that you'll be rejected, which will further damage your credit file.

If you apply for a credit card and are rejected you should resist the temptation to make any more applications straight away as multiple applications, along with subsequent rejections, will inflict additional damage on your credit file and lead to even further problems getting credit.

Use MoneySupermarket's search tools

You can use MoneySupermarket to instantly compare credit cards from more than 30 providers and find the best deal on balance transfers, purchases, cashback and any other credit card you may be interested in.

If you are unsure as to whether or not you will be accepted for a new credit card then you should use MoneySupermarket's SmartSearch facility, which not only allows you to instantly compare a range of credit cards but to get an indication of your chances of acceptance for each card without leaving a footprint on your credit file.

Furthermore, once you have used SmartSearch you will be given the option of free, lifetime access to your credit report via Noddle, which is part of CallCredit, one of the three main credit reference agencies.

So once you are happy your credit file is correct and up to date, you will not have to shell out £2 to each of the agencies every time you want to check it, which should make your financial spring cleaning more time and cost effective.

MoneySupermarket also offers a new Pre-Approved personal pricing service in conjunction with Halifax that works alongside SmartSearch.

If you use SmartSearch and you are an existing Halifax customer to whom they would be willing to offer a credit card, MoneySupermarket will present you with a pre-approved offer on a Halifax credit card.

This is particularly useful if you are not a customer that will be accepted at the headline rate as it will give you the exact length of 0% interest period and interest rate you will be eligible for, so you can sort out your finances accordingly.

And, if you need a further incentive to try it out, MoneySupermarket is offering you the chance to win a new iPad.

Anyone that takes out a credit card using SmartSearch will be entered into a prize draw to win Apple's new must-have gadget, click here for details.

Please note: Any rates or deals mentioned in this article were available at the time of writing. Click on a highlighted product and apply direct.

Cookie Use

MoneySupermarket uses cookies, small text files which are downloaded to your computer's hard drive when you visit most websites.

Cookies are harmless files which can help improve the experience. Cookies allow websites to respond to you as an individual. The website can tailor its operations to your needs, likes and dislikes by gathering and remembering information about your preferences.

By accepting cookies, MoneySupermarket is able to provide you with a better service and customise your experience with us.